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Thermo Fisher Scientific Inc (NYSE:TMO)
Beneish M-Score
-2.59 (As of Today)

The zones of discrimination for M-Score is as such:

An M-Score of less than -2.22 suggests that the company is not an accounting manipulator.
An M-Score of greater than -2.22 signals that the company is likely an accounting manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.59 suggests that the company is not a manipulator.

TMO' s 10-Year Beneish M-Score Range
Min: -3.03   Max: -0.55
Current: -2.59

-3.03
-0.55

During the past 13 years, the highest Beneish M-Score of Thermo Fisher Scientific Inc was -0.55. The lowest was -3.03. And the median was -2.45.


Definition

The M-score was created by Professor Messod Beneish. Instead of measuring the bankruptcy risk (Z-Score) or business trend (F-Score), M-score can be used to detect the risk of earnings manipulation. This is the original research paper on M-score.

The M-Score Variables:

The M-score of Thermo Fisher Scientific Inc for today is based on a combination of the following eight different indices:

M=-4.84+0.92 * DSRI+0.528 * GMI+0.404 * AQI+0.892 * SGI+0.115 * DEPI
=-4.84+0.92 * 0.8735+0.528 * 0.9152+0.404 * 0.979+0.892 * 1.1323+0.115 * 0.8269
-0.172 * SGAI+4.679 * TATA-0.327 * LVGI
-0.172 * 1.0048+4.679 * -0.0123-0.327 * 0.9491
=-2.59

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

This Year (Jun15) TTM:Last Year (Jun14) TTM:
Accounts Receivable was $2,631 Mil.
Revenue was 4270.9 + 3918.8 + 4492.8 + 4171.4 = $16,854 Mil.
Gross Profit was 1941.8 + 1822.5 + 2091.9 + 1933.6 = $7,790 Mil.
Total Current Assets was $6,237 Mil.
Total Assets was $41,774 Mil.
Property, Plant and Equipment(Net PPE) was $2,407 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,720 Mil.
Selling, General & Admin. Expense(SGA) was $4,754 Mil.
Total Current Liabilities was $6,100 Mil.
Long-Term Debt was $10,664 Mil.
Net Income was 511.6 + 385.1 + 601.2 + 471.6 = $1,970 Mil.
Non Operating Income was 3 + -3.9 + 4.9 + 5.2 = $9 Mil.
Cash Flow from Operations was 764.9 + 80 + 953.7 + 676 = $2,475 Mil.
Accounts Receivable was $2,660 Mil.
Revenue was 4321.9 + 3903.5 + 3466.9 + 3191.8 = $14,884 Mil.
Gross Profit was 1846.5 + 1620 + 1481.7 + 1347.9 = $6,296 Mil.
Total Current Assets was $5,944 Mil.
Total Assets was $44,313 Mil.
Property, Plant and Equipment(Net PPE) was $2,472 Mil.
Depreciation, Depletion and Amortization(DDA) was $1,300 Mil.
Selling, General & Admin. Expense(SGA) was $4,178 Mil.
Total Current Liabilities was $6,236 Mil.
Long-Term Debt was $12,502 Mil.



1. DSRI = Days Sales in Receivables Index

Measured as the ratio of days’ sales in receivables in year t to year t-1.

A large increase in DSR could be indicative of revenue inflation.

DSRI=(Receivables_t / Revenue_t) / (Receivables_t-1 / Revenue_t-1)
=(2631 / 16853.9) / (2660.1 / 14884.1)
=0.1561063 / 0.17872092
=0.8735

2. GMI = Gross Margin Index

Measured as the ratio of gross margin in year t-1 to gross margin in year t.

Gross margin has deteriorated when this index is above 1. A firm with poorer prospects is more likely to manipulate earnings.

GMI=GrossMargin_t-1 / GrossMargin_t
=(GrossProfit_t-1 / Revenue_t-1) / (GrossProfit_t / Revenue_t)
=(1822.5 / 14884.1) / (1941.8 / 16853.9)
=0.42300845 / 0.46219569
=0.9152

3. AQI = Asset Quality Index

AQI is the ratio of asset quality in year t to year t-1.

Asset quality is measured as the ratio of non-current assets other than plant, property and equipment to total assets.

AQI=(1 - (CurrentAssets_t + PPE_t) / TotalAssets_t) / (1 - (CurrentAssets_t-1 + PPE_t-1) / TotalAssets_t-1)
=(1 - (6236.6 + 2406.9) / 41774.4) / (1 - (5944.4 + 2472) / 44313.4)
=0.79309098 / 0.81007099
=0.979

4. SGI = Sales Growth Index

Ratio of sales in year t to sales in year t-1.

Sales growth is not itself a measure of manipulation. However, growth companies are likely to find themselves under pressure to manipulate in order to keep up appearances.

SGI=Sales_t / Sales_t-1
=Revenue_t / Revenue_t-1
=16853.9 / 14884.1
=1.1323

5. DEPI = Depreciation Index

Measured as the ratio of the rate of depreciation in year t-1 to the corresponding rate in year t.

DEPI greater than 1 indicates that assets are being depreciated at a slower rate. This suggests that the firm might be revising useful asset life assumptions upwards, or adopting a new method that is income friendly.

DEPI=(Depreciation_t-1 / (Depreciaton_t-1 + PPE_t-1)) / (Depreciation_t / (Depreciaton_t + PPE_t))
=(1300.1 / (1300.1 + 2472)) / (1720.4 / (1720.4 + 2406.9))
=0.34466212 / 0.41683425
=0.8269

6. SGAI = Sales, General and Administrative expenses Index

The ratio of SGA expenses in year t relative to year t-1.

SGA expenses index > 1 means that the company is becoming less efficient in generate sales.

SGAI=(SGA_t / Sales_t) / (SGA_t-1 /Sales_t-1)
=(4753.7 / 16853.9) / (4178 / 14884.1)
=0.28205341 / 0.28070223
=1.0048

7. LVGI = Leverage Index

The ratio of total debt to total assets in year t relative to yeat t-1.

An LVGI > 1 indicates an increase$sgai= in leverage

LVGI=((LTD_t + CurrentLiabilities_t) / TotalAssets_t) / ((LTD_t-1 + CurrentLiabilities_t-1) / TotalAssets_t-1)
=((10663.7 + 6100.4) / 41774.4) / ((12502 + 6235.6) / 44313.4)
=0.4013008 / 0.42284275
=0.9491

8. TATA = Total Accruals to Total Assets

Total accruals calculated as the change in working capital accounts other than cash less depreciation.

TATA=(IncomefromContinuingOperations_t - CashFlowsfromOperations_t) / TotalAssets_t
=(NetIncome_t - NonOperatingIncome_t - CashFlowsfromOperations_t) / TotalAssets_t
=(1969.5 - 9.2 - 2474.6) / 41774.4
=-0.0123

An M-Score of less than -2.22 suggests that the company will not be a manipulator. An M-Score of greater than -2.22 signals that the company is likely to be a manipulator.

Thermo Fisher Scientific Inc has a M-score of -2.59 suggests that the company will not be a manipulator.


Related Terms

Altman Z-Score, Piotroski F-Score, Accounts Receivable, Revenue, Gross Profit, Total Current Assets, Total Assets, Property, Plant and Equipment, Depreciation, Depletion and Amortization, Selling, General & Admin. Expense, Total Current Liabilities, Long-Term Debt, Net Income, Non Operating Income, Cash Flow from Operations


Historical Data

* All numbers are in millions except for per share data and ratio. All numbers are in their own currency.

Thermo Fisher Scientific Inc Annual Data

Dec05Dec06Dec07Dec08Dec09Dec10Dec11Dec12Dec13Dec14
DSRI 0.99951.72650.4050.94640.990311.09440.94561.02840.9871
GMI 1.01331.09741.05950.97421.00640.97920.98020.97981.00220.9522
AQI 1.19261.2490.99820.95580.99371.01891.02381.00090.83381.2464
SGI 1.19361.442.57051.07710.9631.04561.09351.08231.04641.2902
DEPI 0.66241.89810.43010.97541.03251.04811.01810.95841.00460.8817
SGAI 1.01881.0120.89320.98061.02940.98411.03450.99790.98171.1011
LVGI 1.31740.68750.91340.90881.01291.02271.8861.0061.19181.0425
TATA -0.0201-0.0113-0.0341-0.0208-0.0365-0.0203-0.0146-0.0315-0.0214-0.0173
M-score -2.46-1.12-1.77-2.56-2.70-2.54-2.67-2.62-2.64-2.28

Thermo Fisher Scientific Inc Quarterly Data

Mar13Jun13Sep13Dec13Mar14Jun14Sep14Dec14Mar15Jun15
DSRI 0.94861.00571.01861.02841.29661.20091.04670.98710.76880.8735
GMI 0.98530.99851.00051.00221.00320.99620.97220.95220.92530.9152
AQI 0.98820.96390.94720.83381.04871.10261.12471.24641.00980.979
SGI 1.05961.04841.0441.04641.09161.16491.23141.29021.22481.1323
DEPI 0.9591.00650.99531.00461.19781.07890.96230.88170.73420.8269
SGAI 0.98280.98460.98120.98171.03441.05651.08741.10111.04521.0048
LVGI 1.02761.02580.93571.19181.35511.28611.27171.04250.93990.9491
TATA -0.0264-0.0222-0.0211-0.0214-0.0058-0.0162-0.0177-0.0173-0.0208-0.0123
M-score -2.62-2.56-2.52-2.64-2.23-2.28-2.39-2.28-2.64-2.59
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